As Australia"s Housing Bubble Bursts, Optimism For The Year Ahead Crashes To Record Low

Zero Hedge readers might have noted our increasingly bearish tone on all things Australian – economic that is, since the cricket team just whipped the English in the first test match in Brisbane. The focal point of our concern is the housing market and, earlier this month, we discussed how the world’s longest-running bull market – 55 years – in Australian house prices appears to have come to an end. We followed this up with “Why Australia’s Economy Is A House Of Cards” in which Matt Barrie and Craig Tindale described how Australia’s three decades long economic expansion had mostly been the result of “dumb luck”.

As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.

Last week, in "The Party"s Over For Australia"s $5.6 Trillion Housing Market Frenzy", we highlighted some scary metrics for Australia’s housing bubble cited by Bloomberg. In particular, we showed how the value of Australian housing is more than four times gross domestic product. This is higher than other western nations, like New Zealand, Canada and the UK, which are experiencing their own housing bubbles. The ratio of house values to GDP in the US seems positively tame in comparison.

It seems that it’s nor just us and other market commentators who are becoming progressively more pessimistic on Australia’s outlook. Australians are coming round to the same opinion, as Australia"s Domain.com explains (note: Roy Morgan is an Australian market research company).

The number of Australians optimistic about the year ahead has dropped to a never-before-seen low as mortgage holders eye a combination of record-high household debt and the possibility of interest rate hikes in 2018.

 

According to a Roy Morgan survey taken in mid-November, 31 per cent of people think 2018 will be “better” than 2017 – the lowest figure recorded since the survey began in 1980.

Along with a slide in positivity, the survey showed a spike in active negativity, with 30 per cent expecting next year to be “worse” than 2017 and 39 per cent saying it will be “the same”. Younger Australians are more positive than older generations, with almost half (46%) of 18-24-year-olds expecting next year to be better, while just 20 per cent of over 65s feel that way. In fact, a noticeable drop in optimism can be seen as Australians age.

AMP notes that the greater level of optimism among younger Australian’s is probably due to them being saddled with less debt.  Their older countrymen are becoming fearful that a rise in interest rates could lead to a housing crash.

“(Older Australians) have the debt,” AMP Capital chief economist and head of investment strategy Shane Oliver told Domain. “There’s a growing problem in Australia where a lot of people might own their home by the time they’re 65 but they still have a lot more debt than previous generations.

“If you were going to worry about a property price collapse, you wouldn’t be as worried about it if you were a younger Australian – they might actually see an opportunity. If you’re an older Australian with a lot of debt it might be more of a worry for you.” Households are sitting on record high debt, above 190 per cent of income, which is why talk of interest rate hikes have been hitting confidence.

While the Australian central bank sees a rate hike as unlikely in the “near-term”, Domain.com notes that the next move is likely to be up.

Reserve Bank governor Philip Lowe reiterated last week he sees the next move from the central bank as being upwards, and while most economists expect those hikes in late 2018 or even 2019, ANZ is hanging onto its call that two rate hikes await next year.

While Australian citizens are the second most-indebted in the world, the country’s banks are the most exposed to housing debt.

They are also potentially in the firing line for a government enquiry as AMP’s Shane Oliver tells Domain.com.

Meanwhile, confidence in the institutions to which Australians are so deeply indebted has scarcely been lower, with scandals and the threat of a royal commission a part of the landscape.

 

“The bank questions seem to keep coming – it seems to have a life of its own,” Dr Oliver said. “This idea of the royal commission or commission of inquiry… putting aside the should we or shouldn’t we… that constant talk that there’s some sort of problem with the banks is probably affecting people as well.”

This was Australia’s ABC News earlier today.

The calls for a full inquiry have been relentless for years, emanating from a broad section of the community — from farmers, small business and households, jaded and disillusioned with the industry"s rampant profiteering, fee gouging and blatant disregard for the law. How many times can a Commonwealth Bank chairman sincerely apologise for a yet another breach of trust? What, pray tell, will be the cause of next year"s?

But the overwhelming reason for an inquiry rests on just one principle — accountability. What has been forgotten in the endless round of scandals in recent years is that the Australian banking sector is a taxpayer subsidised industry. It"s an industry that pays ridiculously bloated salaries to its leaders; that showers itself with massive bonus payments when profits are soaring but instantly demands taxpayer protection and support when the tide turns.

Having resolutely opposed a formal enquiry, the Australian government may have its hand forced as Liberal National Party Senator, Barry Sullivan, is threatening a to put a motion to the senate, possibly as early as this week. This might undermine confidence in Prime minister, Malcolm Turnbull. Furthermore, as ABC News notes, the banks have also taken the usual, and likely misguided step, of appealing to their biggest critics.

Senior Coalition members are terrified, having been forced for so long to walk the tightrope between hauling bankers into line and staunchly opposing an inquiry. If the motion gets up, it would be a major loss of face for Mr Turnbull and the Government, with serious ramifications for his grip on leadership.

In a show of desperation, the banks have opted to go straight to the public, the area where they possibly have the least support, with a multi-million dollar propaganda campaign on free to air television and newspapers. And the fight is likely to get ugly.

With pessimism on the part of Australian public already at record low levels, we suspect that a messy political confrontation between politicians and the banking sector could only be an additional negative for the popping of Australia’s housing bubble. AMP’s Shane Oliver is not optimistic, as Bloomberg notes.

And the general sense of “malaise” could be here to stay, according to Shane Oliver.

“It seems the old days of ‘she’ll be right, mate died off with the Holden Ute,” he said.

For those unfamiliar with the Australian vernacular, a Holden Ute is an iconic pick-up truck. Sales hit record lows last year and the Adelaide manufacturing plant is being shut at the end of this year.
 

Facebook Now Wants Your Nude Photos

To combat ‘revenge porn’, Facebook is now asking users to send in their nudes, to test a new anti-revenge porn technology.

A pilot program is currently underway in Australia, where one in five women aged 18-45 and one in four Indigenous Australians are victims. It appears, Facebook made the right choice to test out Australian users before a much wider and or global rollout occurs.

Australian Government, e-Safety Commissioner Julie Inman Grant said victims of “image-based abuse” would be able to censor images before posted on Facebook’s platform(s).

Grant further said, “we see many scenarios where maybe photos or videos were taken consensually at one point, but there was not any sort of consent to send the images or videos more broadly.”

According to the Daily Mail, sending your nudes to Facebook will stop the so-called ‘revenge porn’ phenomenon:

• The trial requires users to send naughty pictures to themselves via Facebook Messenger.


• Ms Grant said: ‘It would be like sending yourself your image in email, but obviously this is a much safer, secure end-to-end way of sending the image without sending it through the ether.’


• Once the image has been sent, Facebook will then ‘hash’ the image – create a digital fingerprint or link.


• Ms Grant explained: ‘They’re not storing the image, they’re storing the link and using artificial intelligence and other photo-matching technologies.


• ‘So if somebody tried to upload that same image, which would have the same digital footprint or hash value, it will be prevented from being uploaded.’


• If the technology works , the photo should never appear on Facebook.

Facebook announces measures against revenge porn

Antigone Davis, head of global safety at Facebook, said ”the safety and well-being of the Facebook community is our top priority”. And to provide such safety, Facebook wants your nude pictures.

She also added, “as part of our continued efforts to better detect and remove content that violates our community standards, we’re using image matching technology to prevent non-consensual intimate images from being shared on Facebook. These tools, developed in partnership with global safety experts, are one example of how we’re using new technology to keep people safe and prevent harm”.

* * *

We ask one simple question: What Rights Does Facebook Have to Your Photos?

In Facebook’s terms of service: “You own all of the content and information you post on Facebook”.

...but Facebook gets a “non-exclusive, transferable, sub-licensable, royalty-free, worldwide license” to your photos.

* * *

Conclusion- don’t take nudes and problem solved. Otherwise, some creepy techie in Silicon Valley along with artificial intelligence will be admiring what you do on a personal level. SkyNet called it wants your nude pictures.

Martin Armstrong Warns, Australia Is "Crossing The Line Into A Totalitarian State"

Authored by Martin Armstrong via ArmstrongEconomics.com,

Behind the Curtain, there seems to be no government going completely nuts more so than Australia.

They are doubling taxes on all foreigners who own property, which is a violation of international law, and then they made it a crime for a foreign to even buy a house undisclosed.

On top of all of this insanity, then they are planning to strip consumers of their legal protections if they pay in cash and fail to get a receipt.

If an Australian pays for anything in cash, they suspect he is hiding money.

The Australian government is looking to impose penalties if a consumer pays cash and FAILS to get a receipt so they can end the underground economy.

 

They are expecting to change the culture by forcing consumers to ask for a fiscal receipts when paying cash for anything.

 

Now the Australian government has moved beyond eliminating cash, they seek to punish people who pay in cash.

This outrageous proposal is clearly exposing the Australian government as a leftist goose-stepping authoritarian regime going completely insane hunting Australians for taxes. They are even stalking children on their way to school and then check the school as to how they are being paid. This is real Hitler stuff.

That is why the Swiss created numbered accounts because Hitler made it illegal for a German to have any account outside of Germany.

This anti-free society the Australian government is establishing is just off the charts. They have set up a Black Economy Taskforce to hunt down their own citizens.

The Black Economy Taskforce has turned its attention from the businesses to  consumers they now say are “part of the problem” adding that “[w]e intend to examine the merits of consumer focused sanctions, including the loss of consumer protections, warranties and legal rights for people who make cash payments without obtaining a valid receipt.”

They are out to change the entire culture of Australia because the government refuses to see itself as the spendthrift causing the entire problem. They wrote: “This is not simply of matter of imposing new penalties, but part of a wider cultural change agenda.”

This is becoming very dangerous.

Can you imagine a government staking your children? This gestapo agency is indeed spying on its own citizens in every aspect just as did the NAZI government in Germany. They have put forth 35 recommendations contained in the interim report where they are arguing the need for “consumer-focused action” to crack down on cash payments.

Obviously, Australia turned their own people into a hunt for taxes. Can you imagine stalking your children is legal? What is human rights? Australia is hunting its own people as if this were a fox hunt. Those who are looking to adopt children should consider adopting from Australia to save them from a government that is going down the path of a totalitarian regime.

This is always a dangerous historical path to proceed down. It has never ended nicely.

The Planned Destruction Of America: "If They Can't Collapse It Internally They'll Attack The U.S. Externally"

Authored by Jeremiah Johnson (Nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

From within and from without.  Before our very eyes, we are seeing actions taking place both within the U.S. domestically and outside of it.  The scripted plans were set into motion decades ago, and are seeing fruition now, with increases in activities leading toward the planned downfall of the U.S.  The architects follow a very “Orwellian” pattern: it isn’t important who takes the reins of power, if that power is used to promulgate the continually leftward-moving paradigm shift and the continuance of power.  These oligarchs are globalists who wish to remove the national boundaries except to use the governments in an administrative fashion to control the masses.

Sound radical?  It is, as in “Rules for Radicals,” by Saul Alinsky, in a concept known as “organizing the organized.”  In such a fashion, the oligarchy will control the population through the captains…the “duly-elected” commander of the ship of fools.  The apparatus of the military and police being already in place in the nation, then it is just a matter of appropriating that apparatus to use it as a control mechanism and enforce the totalitarianism.  It is not a new story.  So why is this era different?

Technology.  The technology to monitor hundreds of millions of human beings on CCTV (Closed-Circuit Television) cameras.  The technology to keep track of every person…every item purchased and the funds spent, as well as the balance in the bank account and the source of the income.

“What is your source of income, citizen?  Where is this money here coming from? Oh, you claimed not to be able to pay your traffic ticket, but we have you right here at 10 pm on camera withdrawing $20 from the ATM next to your house.”

Everyone carries around their personal monitors, the personal tracking device of the cellular telephone.  Almost everyone.  I was amazed the other day as a man showed some friends of mine how there’s an app on his cellular telephone that allows you to see a heat signature…yes, thermal imaging! of a person standing just 10 feet away from him.  I was amazed because this is on some average person’s cellular phone, now.

These oligarchs and politicians who had their start as children weaned on the milk of the poisonous Frankfurt Economic School teachings…the creators of the Warburg’s and Rothschilds, who readily embrace Moore’s “Utopia,” while scoffing at the world’s billions whom they fully intend on destroying.  Utopias are expensive, with a cost in removal of undesirables.

Technology will help propel the New World Order into existence.

They’re working really, really hard on controlling all the cash and removing physical cash from the hands of the people.  Success in this endeavor brings with it a total loss of privacy, as all electronic funds can be monitored, and made to disappear with no recourse in the blink of an eye.  An Australian woman whose name I will not mention recently sent me an e-mail informing me that the Australian government is trying to place “chips” in $100 bills to “monitor the cash supply and prevent people from hoarding cash.”

The days of cash everywhere are numbered, as once it is removed, they can do what they will to everyone’s funds.  It can be anything: a computer glitch, a solar flare, an EMP (Electromagnetic Pulse) attack, or a cyberattack to take it all to a “zero” balance.  Notice how the states are one by one beginning to become insolvent?  Notice how the narrowed eyes of the suit-swathed “gentlemen” are now on the IRA’s?  These are now being proposed as the means of closing the holes in the unfunded liabilities?

The unfunded liabilities that were leveraged after NAFTA was created…the “shell game” of jobs and international trade…but in reality, to create more unfunded liabilities and derivatives ventures, as well as Credit Default Swaps (CDS) and fostered indebtedness in foreign nations.  The forced dependency of a “client state” as created by the IMF, shifting revenues and expenditures back and forth with plenty of fatback dripping from each transaction for bankers and host-nations’ warders alike.

Europe is tottering akin to a group of drunken men in various stages of sodden decay.  European nations are caught between the need to maintain their national identity and the desire to join hands and sing “Kumbaya” in 50 different languages as they embrace the utopia.

The forced integration of illegal aliens (termed “refugees” in Europe) will be the death-knell for those governments, as they absorb even greater expenses and burdens…self-inflicted, mind you…taking in a hostile population whose dogma demands the subversion and destruction of any foreign land they enter.

Cloward and Piven on overdrive, as they take us down with the destruction (to paraphrase Michael Savage) of borders, language, and culture.  The “Kumbaya” singers do not realize they will all be exterminated at the end of it by the oligarchy and the politicos who are of one mindset.

First the U.S.  Any country that has a Constitution such as ours that recognizes the rights of its citizens to be armed…. oh, that country has to go.  They’re collapsing the economy, and shaping it to be more interdependent with Europe and the rest of the world.  The President is under attack from every angle, as the Marxists force him up against the ropes, never able to come forth with an attack of his own.  They are checkmating him at every angle.  In the meantime, the policies of Obama are still in place outside of the country.  We are still bolstering ISIS and trying to oust Assad in Syria.  The New Cold War is forming, and we have flashpoints in Syria, Ukraine, and North Korea that could lead to a war with the drop of a hat.

If they can’t collapse it internally, they’ll attack the U.S. externally.

Civil unrest, economic collapse, and an attack on the current administration are the vehicles used to promote the fall of the U.S. domestically.  Warfare (initiated by a foreign nation or by the U.S.) is used outside of the country.  Both use different approaches to work toward the goal of the United States coming to an end.  Read history, especially Solzhenitsyn to see how this occurs.  Before a nation comes to an end, its citizens are in denial that it truly has reached that point.  The United States is in its final days, now.  It will come to an end.  Whether it remains that way and is absorbed by the NWO, or has a new beginning will be up to us.

Vatican's Finance Chief, Cardinal Pell, Charged With Multiple Sex Assaults

The Vatican"s finance chief, Australia"s highest ranking Roman Catholic and one of Pope Francis" most senior advisors, Cardinal George Pell, has been charged with multiple sex offenses by Australian police in the latest blow to the Vatican’s attempts to put decades of child sex abuse scandals behind it.

"Cardinal Pell is facing multiple charges in respect of historic sexual offenses," Victoria state police deputy commissioner Shane Patton said, following a police investigation that followed the same processes and procedures applied in other sex abuse cases. Cardinal Pell has been summoned to appear in court in Melbourne on July 18 to face the charges, which relate to complaints made by more than one person, according to the FT. To attend the hearing the 76-year-old would have to return to Australia from Rome, where he has been tasked by the Pope with cleaning up the Vatican’s finances.

Cardinal George Pell at St Mary"s Cathedral, Sydney

“He is to appear in Melbourne magistrates’ court on July 18 in a filing hearing and it relates to multiple charges and multiple complainants,” added Patton.

There might be up to 10 alleged victims, Australian news website News.com.au reports, adding that they were minors at the time of the alleged assaults and are now aged from their late 20s to their early 50s. The allegations are believed to stretch from the time that Pell was a priest in the Australian town of Ballarat to when he was Archbishop of Melbourne. It is alleged that the cardinal groomed boys at a swimming pool in Ballarat in the 1970s and committed sexual assaults at St Patrick’s Cathedral in Melbourne, according to The Australian.

Since 2014, Pell has lived in the Vatican, with which Australia has no extradition treaty, meaning the cardinal could potentially avoid prosecution if he chose not to return to his home country. However, the Australian Catholic Church said in a statement Thursday that the cardinal "will return to Australia, as soon as possible, to clear his name."

"He said he is looking forward to his day in court and will defend the charges vigorously," the statement added.

Over the past 18 months Cardinal Pell has publicly denied sex abuse allegations that were leaked to the Australian media. In July, ABC, the Australian state broadcaster, interviewed two complainants, Lyndon Monument and Damian Dignan, about alleged inappropriate touching at a Ballarat swimming pool in the 1970s. They both allege the cardinal touched their genitals while playing a game in the pool where he would throw them and the other boys up in the air. Cardinal Pell has repeatedly denied these allegations.

When news of the police probe initially emerged last year, Cardinal Pell wrote to Robin Scott, Victoria’s acting minister of police. He formally requested an inquiry into the “maliciously timed leaking of details of a police investigation into purported allegations” against him.

In a statement issued by the Catholic Archdiocese of Sydney, Cardinal Pell said he “strenuously denied” all the allegations.“Cardinal Pell will return to Australia, as soon as possible, to clear his name following advice and approval by his doctors who will also advise on his travel arrangements,” said the statement.

* * *

Cardinal Pell has appeared several times at a long-running Australian government commissioned inquiry into institutional responses to child sex abuse, most recently last year via video-link from Rome. During that appearance Cardinal Pell denied he knew about abuse perpetrated by paedophile priests in the Australian town of Ballarat in the 1970s and 1980s. He has also denied claims that he tried to “silence” a victim of abuse.

Cardinal Pell cited ill health when making a decision not to return to Australia to appear before the committee in person.

Pell, 76, was promoted to cardinal in 2003 and three years ago he was appointed to serve as the Vatican treasurer, considered to be the third most powerful post behind the Pope. While it is the first time that formal charges are brought against the clergyman, he was subject of an investigation in the early 2000s after claims emerged that he had molested an altar boy back in the 1960s, The Age reported. At the time, Pell denied the allegations against him, dubbing them "lies."

In February, the Australian Royal Commission into Institutional Responses to Child Sexual Abuse released a report stating that more than 4,000 children, mostly boys, have been allegedly sexually abused by Catholic priests in Australia over a period of decades.

According to the investigation, since the 1950s some 7 percent of priests in the country were alleged perpetrators. The commission also said that since the 1980s, the Catholic Church has paid over $200 million to victims of alleged sex abuse committed by priests in Australia over decades.

* * *

Cardinal Pell is the most senior Catholic church official to have been charged with sex offences. However, a series of international probes into the Church’s handling of sex abuse have uncovered evidence that paedophile priests were regularly moved between parishes rather than defrocked and referred to police.

The charges laid against Cardinal Pell will cast a cloud over the Pope Francis’s efforts to draw a line under child abuse issues that have dogged the church for decades. In a December letter to bishops, the Pope said there was “zero tolerance” for child sexual abuse by clergy.

Pope Francis has stood by Cardinal Pell throughout the Australian abuse scandals. When asked about Cardinal Pell last July, the Argentine pontiff said that “one cannot judge” before the judiciary had taken its course. “After the justice system speaks, I will speak,” the Pope added.

Australia Has The World's Worst Money-Laundering Property Market

Authored by Leith van Onselen via MacroBusiness.com.au,

Transparency International has released a new report, entitled Doors Wide Open: Corruption and Real Estate in Four Key Markets, which has identified Australia, Canada, the UK and the USA as the top four spots targeted by corrupt officials or criminals for real estate crime. 

Australia is the worst, failing to address 10-out-of-10 loopholes.

Below are the key extracts:

The real estate market has long provided a way for individuals to secretly launder or invest stolen money and other illicitly gained funds… According to the Financial Action Task Force (FATF), real estate accounted for up to 30 per cent of criminal assets confiscated worldwide between 2011 and 2013…

In many such cases, property is purchased through anonymous shell companies or trusts without undergoing proper due diligence by the professionals involved in the deal. The ease with which such anonymous companies or trusts can acquire property and launder money is directly related to the insufficient rules and enforcement practices in attractive markets…

This assessment identifies the following 10 main problems that have enabled corrupt individuals and other criminals to easily purchase luxurious properties anonymously and hide their stolen money in Australia, Canada, the UK and the US:

1. Inadequate coverage of anti-money laundering provision


2. Identification of the beneficial owners of legal entities, trusts and other legal arrangements is still not the norm


3. Foreign companies have access to the real estate market with few requirements or checks


4. Over-reliance on due diligence checks by financial institutions leads to cash transactions going unnoticed


5. Insufficient rules on suspicious transaction reports and weak implementation


6. Weak or no checks on politically exposed persons and their associates


7. Limited control over professionals who can engage in real estate transactions: no “fit and proper” test


8. Limited understanding of and action on money laundering risks in the sector


9. Inconsistent supervision


10. Lack of sanctions

Australia has severe deficiencies under all 10 areas identified in the research and is therefore not in line with any of the commitments to tackle corruption and money laundering in real estate made in international forums.

In Australia, real estate agents are not subject to the provisions of the Anti-Money Laundering and CounterTerrorism Financing Act 2006. Other professionals such as lawyers and accountants who may also play a role in the sector are not covered either. This means that properties can be bought and sold without any due diligence on the parties. Currently there are no requirements for real estate agents or any professional involved in real estate deals to submit STRs, even if they suspect illegal activity is taking place, and there are no requirements or rules for verifying whether customers are PEPs or their close associates…

In Australia, Canada and the US, the current anti-money laundering framework shows a tendency to rely on financial institutions to conduct the necessary background checks on real estate transactions… there are no checks on cash transactions.

In Australia, 70 per cent of Chinese buyers pay in cash and they represent the largest proportion of foreign purchases in the country.

What a complete and utter disgrace. Legislation to implement the second tranche of anti-money laundering (AML) legislation covering real estate gate keepers has been gathering dust for nearly a decade despite explicit criticism from the global regulator, the Paris-based Financial Action Taskforce (FATF), that Australian homes are a haven for laundered funds, particularly from China, as well as similar warnings from Austrac.

In the meantime, dodgy Chinese money has piled into Australian property, in the process inflating house prices and pricing young Australians out of home ownership.

When will Australia’s politicians finally take action and end more than a decade of neglect by bringing Australia’s real estate gatekeepers into the AML net – as demanded by FATF and Austrac, promised by the federal government in 2003, and intended when the AML legislation was first drafted in 2006?

Or will the Australian Government continue to turn a blind eye to the dirty foreign money flooding into Australian property?